When the U.S. Spends More on Fighting a Disease, the Rest of the World Spends Less

December 14, 2017

Professor David Ridley studies funding for medical research across countries

Professor David Ridley studies government funding of disease treatments

When the U.S. spends more to research cures for a neglected disease, other countries spend less on that same disease, according to new research from Duke University’s Fuqua School of Business.

Professor David Ridley found a 10 percent increase in U.S. funding was associated with a 2-3 percent reduction by other governments. It is the first time the effects of changes in U.S. research funding on other countries has been measured.

“Governments might be free riding on one another,” Ridley said. “Alternatively, governments might be shifting resources away from diseases heavily funded by the U.S. to diseases receiving relatively little funding by the U.S. Either way, we need to pay attention because these diseases inflict a horrible global burden.”

A wide range of tropical diseases sicken and kill thousands of people worldwide each year. They’re considered neglected because treatments aren’t profitable, since most sufferers are in impoverished areas.

“Funding research into tropical disease treatments is one of the best ways the U.S. can improve global well-being,” Ridley said.

Ridley’s previous research includes a proposal for a federal voucher system to encourage private firms to develop tropical disease treatments. Congress made that proposal law in 2007.

"There are many cases in which all countries increase funding, for high profile diseases or after headline-grabbing outbreaks."

The latest research, Strategic interaction among governments in the provision of a global public good, is published in the Journal of Public Economics. Ridley worked with Margaret Kyle of Mines ParisTech and PSL Research University and Duke Ph.D. student Su Zhang.

The researchers studied data collected annually by the non-profit Policy Cures that accounts for every dollar spent on neglected disease research and development since 2007.

There are many cases in which all countries increase funding, for high profile diseases or after headline-grabbing outbreaks.

“If you do a simple correlation between U.S. and international funding, it will be positive because governments share an interest in funding diseases with high burden,” Ridley said. “But if you only look at that, then you’re missing something.”

The researchers looked for factors beyond the disease itself to isolate how changes in U.S. government funding — which accounted for more than half of global research funding for 15 neglected diseases from 2007 to 2014 — affected funding from governments and foundations in 41 other countries.

“We needed an effect unrelated to the disease, something that shocks U.S. funding,” Ridley said.

“If the U.S. government is heavily funding one disease, then other governments can focus on other diseases.”

The researchers used changes in the membership of congressional appropriations committees. Senators or representatives who come from states with major research universities tend to seek more funding for the National Institutes of Health, which supports those schools.

“If the appropriations committees have more members of Congress from states representing major research universities, then there’s more funding for medical research, and we see other countries adjust to that,” Ridley said. “Conversely, there is less N.I.H. funding when there are fewer such committee members, and other countries increase funding.”

Ridley said some of the funding change might be good for global health. “If the U.S. government is heavily funding one disease, then other governments can focus on other diseases.”

The U.S. spends $840 million on HIV/AIDS research each year. The impact of the disease in Brazil is almost twice what it is in the U.S.,  but the Brazilian government spends less than a million dollars per year on HIV research.

In contrast, Brazil spends $7 million a year — more than it spends on any other disease — on research for dengue, which has much less impact on its population than HIV/AIDS.. There are no known treatments for dengue, also known as breakbone fever, a mosquito-borne viral infection that can be fatal. While cases are underreported, the World Health Organization estimates dengue affects about 96 million people each year.

“Dengue might receive that funding in Brazil because the U.S. is spending so much on research into HIV/AIDS,” Ridley said. “HIV is of course a huge burden, so maybe every funder out there looks at it. But it might be good if Brazil focuses on dengue rather than HIV.”

Besides spending far more in magnitude than other countries, the U.S. also spends more on disease research as a share of GDP than do other countries.

“The U.S. is fairly criticized in some ways,” Ridley said, “but it deserves credit for what it’s doing in neglected diseases, and other countries should be encouraged to do more — especially when you consider the awful impact of the diseases.”

This research received support from Health Chair – a joint initiative by PSL, Université Paris-Dauphine, ENSAE, MGEN and ISTYA under the aegis of the Fondation du Risque (FDR).

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